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Commercialisation strategy for early stage companies.
YCF Annual Conference 2013, Stirling
16 September 2013
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Commercial development & transformation …
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Crowdfunding Fuel3D … the options
1. Equity Based Crowdfunding: Investors receive a stake in the company. (If Fuel3D goes big, you get a percentage of the prize). 2. Lending Based Crowdfunding: Investors are repaid for their investment over a period of time. (You invest in Fuel3D, and get your money paid back over time). 3. Reward Based Crowdfunding: Investors receive a tangible item or service in return for their funds. (You invest in Fuel3D, and get a first edition.)
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STEP 1: Don't bother if your idea sucks
FUNDING UNSUCCESSFUL FUNDING UNSUCCESSFUL FUNDING UNSUCCESSFUL
http://www.buzzfeed.com/katienotopoulos/37-saddest-failed-kickstarters
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STEP 2: Do your homework
Scope
Timeline
Money
Pledge Levels
The Video
Updates
Community
Project Page
Clearly defined proposition with a firm deliverable.
Funding periods up to 60 days … <30 works best!
Av. project is $5k but range is $1 TO $10M … 94% of successful projects raise their goal, at around 130%
Most popular pledge is $25 Average pledge is $75 Pledge range is $1-$10,000 Those with a video succeed
50% of the time compared to those without of 30%
Be thorough: how is project to be achieved, use of funds, the IP,
the team, excitement!
Keep updating through the campaign; be ready for trolls … all
channels: Kickstarter and others
Be very clear on
your audience
and its drivers; media;
bloggers; Twitter,
Facebook, LinkedIn,
opinion leaders.
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STEP 3: Pitch like you’re gonna’ lose the farm …
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STEP 4: Submit, respond, be patient …
Pre-Kickstarter
No contact with a human
being whatsoever
Submission
Complete everything to
100% of your abilities
Re-submission
Respond accurately and
quickly to feedback … 110%
Decision
Be ready one way …
or the other
KEEP CALM
AND
RESPOND PROMPTLY
KEEP CALM
AND
HAVE PLAN B READY
KEEP CALM
AND
BE READY TO ROLL
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STEP 5: Holy crap … we’re live!
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JUMP TO STEP 8: Well …
Early
Majority
Late
Majority Laggards
High-end 3D scanning
3D printing
Low cost 3D scanning
Innovators Early
Adopters
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Commercial development & transformation …
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Create a full understanding of market drivers
• Don't believe your own spin ... it is very easy to become blinkered to what is going on around you
• Account for your ‘darkest moments’ with your product or service
• Speak to as many contributors as possible
– Large corporate buyers
– Heads of trade associations
– End-users
– Distributors and VARs
• Prepare to go fishing … At this stage you don't really know what's going to happen and how people may react to your proposition
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Identify and connect with target customers
• Wherever they may be … Get on a plane … Use web conferencing
• Test your slideware … share your demo
• Test your assumptions ... go from transmit to receive quickly ... listen and learn
• Interview potential customers ... Have a clear set of questions you want answers to: commercial models; pricing; volumes; decision timelines etc. … Nice to haves; must haves
• Don't accept an appointment if you've been bumped to a middle manager without purchasing authority
• Go direct to the person you want to speak to
– It’s a tough job but someone's got to do it … If you can't then get someone else to do it for you … quickly
• You will only get one chance to go back to them … if you want to!
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Applications Score
140
321
281
380
341
333
186
172
260
164
239
Scoring Factor Low Score High Score
Existing Market Indicates that MDL will
require early-adopters to
create new market push
Indicates that MDL's
technology adds to an
existing market
opportunity/application
Size of Market Indicates that the market
opportunity is niche or
emerging
Indicates that the scale of
the market opportunity is
large
Sales Cycle Indicates that the sales
cycle will be long -
evangelising MDL's
technology
Indicates that MDL's
technology solution will add
great value to an existing
applicationNote 1: The application score per sector will be greater if there are more applications that utilise
MDL technology
Engineering Indicates that high levels of
engineering and integration
will be required to build a
new type of solution
Indicates that integration
with an existing technology
will be relatively simple
Note 2: The scoring ratios aggregate different ratings and therefore are not indicative of the size or
value of a market, they simply indicate the relevance of MDL's technology/opportunity
Volume/Value Indicates that the total
number of units of the
application (or value) will
be relatively small
Indicates that the total
number of units of the
application (or value) will
be relatively large
Sector
Consumer
Retail
Public Attractions & Exhibitions
Information Communications Technology (PAN)
Transport Hubs
Automotive
Smart Home
Education
Healthcare
Transportation & Distribution
Industrial & Manufacturing (incl. Farming)
0 100 200 300 400
Consumer
Retail
Public Attractions & Exhibitions
Healthcare
Transportation & Distribution
Industrial & Manufacturing (incl. Farming)
Automotive
Smart Home
Education
Information Communications Technology (PAN)
Transport Hubs
CASE Reference Where to focus your efforts …
Size of opportunity … vs … ability to execute
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Commercial development & transformation …
Aligning with the market (paying customers)
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CASE Reference
Defined network types for multiple
applications, products and
services
Integrated chip technology and standalone modules for new and retro-fit applications
Company XXX
Module Technology
Embedded Chip Technology
Fixed Nodes
Dynamic Nodes
Hardware
Communications Software
Interface Software
Software
Application Engineering
Services Fixed Area Networks
N/W Applications
Dynamic Area Networks
Personal Area Networks
Development Tools
NRE
End-to-end software solutions based on XXX’s proprietary protocol
Integration
Early-stage support for customer deployment of XXX’s technology
Product? Service? Enabling platform?
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Beta development
Be really clear about what you’re doing
• What is the burning problem you are addressing?
• What is unique about what you’re developing … relevant?
• How is it commercialised?
• What are the competition doing … how is the market shifting?
• Financial runway?
• Is version 0.8 good enough to engage with potential customers?
• Patent search • Patent file • Competitor review • Version 1.0 spec • Development plan
Alpha development
• Project management lite
• User testing and feedback
• Budget control
• Alpha test review • Brand name • Test protocol • Beta testers
Feasibility
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Vendor finance
agreements
(tripartite)
Capital Allowences
clarification
requirement
Pricing & finance
formula to align
with Audit Tool 3
Customer
Acceptance
Agreement
MEL SMART
Installation,
Commissioning and
Aftercare
Standards
Brochure (Asset
Management)
Specialist
Contractor Status
and System
Insurance
BSPs Target Vendor
Partner List
Target Corporate
Accounts Meetings
Internal SMM &
SMT Management
ME LES Quoting
and Finance
Process System
Objectives … Leader Deane/PERGALI PERGALI PERGALI … Sif PERGALI … Sif Steve H PERGALI … Sif Geoff Turton Steve Flemming Steve Reece (T2) Harriet/Andy Deane Flint Michelle Coombe
1. Proposition Development n
2. Sales Engagement n n n
3. Delivery Infrastructure n n
4. Finance and Contractual n n n n n n n
5. Internal Roll-out n
Description Finalise paperwork
with Kennet and
Investec … Draft to
go PT next, then
reviewed by Investec
legal … then
concluded
Capital Allowences
will be handled
differently through
Vendor and
Corporate finance
programmes … we
need to clarify how
CAs are managed
when engaging in
corporate
transactions via
Lombard … Cas will
NOT be able to be
claimed by
customers using
Kennet finance route
COMPLETED:
Finance element ....
consideration now for
Excel that pulls-in
data for electricity
pricing, carbon etc.
… SERVICING fees
for new system and
repair/event provision
for old system need
to be accounted for
… output = combined
financial and benefits
charts … accounting
for different funding
source deaWorkl
structure ... Peter
Cole and (probably)
Ian Parry to support
End-user document
signed after
commissioning to
confirm acceptance
of system,
handover/familiarisati
on completion,
accept finance (not
mis-sold) etc. Forms
a part of relations
with both finance
providers and will
need input from
Steve and others.
COMPLETED? Asset Management
and Finance
Solutions brochure
for use within
corporate sales
To account for
design, specifying,
installing,
commissioning,
SLAs, insurance
cover, systems and
processes … 3rd
party equipment
cover (insurance
being run through
Wills insurance) …
Identify and approach
current BSPs (?and
AIs?) to subcontract
to ME LES Asset
Management
6 x BSPs are the
target … on the list:
Track, Rapid, ACS
and McVie … Steve
to send one other …
Coolair meeting also
set-up for 03 Sept …
second meetings
required ASAP for
Phil and Shane to
attend
Initial target list done
… Andy Hart to set-
up meetings with
Priority List: Bourne
Leisure, Center
Parcs, Home Retail
Group, McDonalds,
Poundland and
Whitbread … Phil,
Shane and/or Deane
(where poss) to join
…
Introduction process
for accounting, legal
and senior
management
Sufficient system in
place to manage real
transactions … no
investment into
programming etc. at
this stage … mainly
focussing on the SAP
system … Michelle to
undertake internal
experiments …
system needs to be
ready by end
Septmber latest …
Timescale
OV
ER
DU
E
21 S
epte
mber
2012
TB
C
14 S
epte
mber
2012
CO
MP
LE
TE
D?
28 S
epte
mber
2012
TB
C
TB
C
ON
GO
ING
ON
GO
ING
31 A
ugust 2012
30 S
epte
mber
2012
Project management lite
CASE Reference
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Commercial development & transformation …
Building your launch case: paying customers …
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Recruiting tier 1 customers
• Don't mess about - go straight to the CEO's office ... via the PA is the best route
• Have a CRM system in place and use it … reminders are important!
• Make sure that your entry material is on message
– Very succinct email wording
– 2-pager
– Good website … responsive
– Personalised to the recipient company
– Lay out the commercial upside for them
• Be ready to follow-up 24 hours later
• Be ready to chase the cascade ... you will be pushed down the line
• Do not put up with being bumped to non-decision making middle management … be open/honest/angry
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Active customer relationship build
• Lay out what you expect to happen at this first stage ... conf call, meeting, webinar
• Take the control position by being ready with the next stage … “this is our programme to … yada yada”
• Listen to their feedback, concerns and expectations and be flexible (but don't roll over)
• Don't commit expensive development time or resources unless you have a commitment in place
• Build an early adopter programme:
– Limited slots available
– Clear timelines and outcomes
– Collegiate and participatory …
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Beta-partner programme
• Balanced mix of tier 1 names and faster moving upstarts
• Set a date for phase 1 to be concluded by
• High-level sponsor internally to support you
• Outline what you expect to happen afterwards in terms of commercial outcome
– Proof of concept
– Proof of market acceptance
– Case studies
– Publicity support
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Beta-partner programme CASE Reference
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…. or a Heads of Agreement
• Strike a 2/3 page HoA
– Why you agree it's a good idea to be working together
– Not exclusive … ever … don’t lock out other opportunities
– The commercial relationship (you want their people and some money upfront)
– The timings
– The process for corrective action
– What each party will provide
– Reporting and project management processes
– Publicity and public domain disclosure
– Clarity on IP
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Commercial development & transformation …
Firm launch date for everyone to work towards …
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Awards won for engineering and
innovation
US headquarters established
US based sales, technical support
and service
1400+ patients fitted around the world
800+ trained practitioners
Distribution in US, EU, South America,
Asia Pacific
Major US acquisition
AGREED OBJECTIVES:
Get the i-LIMB Hand to market.
Create early commercial traction.
Set a course for investor ROI.
Post engagement success
At engagement
Patents Secured Demonstration Prototype
Funding in Place
Engineering Expertise Energetic Team
Strong Founding Directors
Pre-market entry with i-LIMB Hand
No commercial engagement
Very early US sales activity
No brand
Product un-tested
Globally dominant competitor
Other established technologies
prevalent
Low headcount
Market release
Touch Bionics Case Reference 2007-2010 period:
Market Entry Strategy Pre-product Customers
Evaluation & Partner Program
Launch Strategy Fundraising Support
Marcomms
CASE Reference
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Awards
Communications
Press
Channel
Online
Collateral
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• Invest in a good CRM system to manage sales enquiries
• Marketing automation assists in keeping costs down and responsiveness up
Marketing mix
Active website
Sales collaterals
Case studies
Public relations
Social media
Events
Telemarketing
Direct marketing
Marketing mix
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Commercial development & transformation …
It’s a dirty job … but someone’s got to do it …
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Direct sales team development
• You must have a direct sales team in order to get first hand customer feedback … You have to touch the customer
• Sales teams need:
– Training
– Sales collateral
– Product demos
• Sales managers (you) need:
– Sales activity reports
– Transparency
– Order information
– Pipeline information
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Commercial partner identification & negotiation
• Distributors
• Value Added Resellers
• Resellers
• If your product is hot then they will come to you
• Motivation and incentivisation are key, therefore you have to be prepared to margin or volume rebates
• Discount incrementally against performance ... don't throw it away
• Fact find questionnaire
– Stability of their business
– Alliance to competitive products
– Their investment into supporting your product
– Their investment into promoting your product
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Commercial development & transformation …
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Commercial realisation plan
Unique reference models to assess the performance of your people, products, services and interaction.
Market
Technology
Marketing
Sales
Comment: The management team were consistent in that they felt that current pricing is appropriate for chosen markets.
Key Highlights
Ability to execute Comment: The team were confident in the product and service offering; it is worth noting the 2.7 score for accessing volume markets
Comment: The good score (2) identifies that partners are active; however the visibility of sales and commercial is low
Comment: These scores demonstrate that the company needs to invest in creating a stronger management layer
Comment: It is felt that the MIS structure would benefit from external guidance and implementation
360 Audit: Executive Summary
Immediate
Action
Required
Action
Possible
Improvement
Good
Result
Market
Technology
Marketing
Sales
Ability to execute
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For further information please contact:
London:
1 Northumberland Avenue
Trafalgar Square
London
WC2N 5BW
t: +44 20 7849 6094
w: www.pergali.com
© Copyright 2013 PERGALI Limited. All rights reserved. PERGALI and its associated logo are trademarks of PERGALI Limited and are the subject of trademark applications or registrations in various countries around the world. All other trademarks are the property of their respective owners. All PERGALI products and services are subject to continuous development. We reserve the right to alter technical specifications without prior notice.
Edinburgh:
3rd Floor
44 Hanover Street
Edinburgh
EH2 2DR
Glasgow:
South Block
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64 Osborne St.
Glasgow
G1 5QH